As we delve into the trends and statistics of October 2023, you’ll gain a clear picture of what’s happening in this dynamic market. Whether you’re a prospective buyer, seller, or investor, staying informed is key to making well-informed decisions. Join us as we explore the data, uncover market shifts, and provide valuable guidance in navigating the Miami real estate scene.
In the most recent housing report from the Miami Association of Realtors, we’ve observed a subtle easing of median sales prices over the past month. However, when we look at year-over-year comparisons, both single-family homes and condos exhibit robust growth.
Single-family homes, for instance, have witnessed a substantial 5.6% increase in median sale price from September 2022 to September 2023, soaring from $568,000 to $600,000. Similarly, condos have experienced an equally impressive surge of 5.1% in median sale price, climbing from $395,000 last year to $415,000 in September 2023.
Yet, when we examine the monthly shifts, we notice single-family home prices in September 2023 showed a noteworthy 3.2% drop from August 2023 when the median sale price stood at $620,000. Meanwhile, for townhomes and condos, the decrease was more modest at 0.2%, as the median sale price shifted from $416,000 in August to $415,000 in September. This dip follows a peak in July when single-family homes reached $631,670 and condos hit $420,000.
Interestingly, Miami stands out globally for its luxury home market, with prices surging. Miami is the only American city ranked among the global cities experiencing the fastest growth, securing the fourth spot with a remarkable 7.5% growth recorded between 2022 and 2023.
Surprisingly, single-family home sales in Miami increased for the first time since January 2022! Single-family homes saw a 2.9% increase in closed sales, with transactions rising from 869 in September 2022 to 894 in September 2023. In contrast, townhomes and condos witnessed a 16.7% decrease in closed sales over the same period, dropping from 1,309 in September 2022 to 1,090 in September 2023.
One of the key reasons for declining condo sales in Miami is the increase in inventory and continuously rising mortgage rates. In fact, mortgage rates have reached their highest point in 23 years. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.57% as of October 12. Just a week later, on October 19, it was reported that mortgage rates hit 8% for the first time since 2000.
When we analyze monthly data, condo sales decreased by 11.5%, with closed sales dropping from 1,230 in August to 1,090 in September. MIAMI REALTORS® Chief Economist Gay Cororaton commented, “The housing market is continuing to adjust to rising mortgage rates and is experiencing bifurcated growth. Homes priced over $600,000 are surging, driven by cash and equity-rich buyers, while sales of lower-priced homes, typically mortgage-financed, are shrinking.”
Active inventory for single-family homes witnessed a 15.2% yearly decrease. In the case of condos, it increased by 1.7% year-over-year. Nonetheless, we are still down 53.7% in inventory compared to September 2019.
For the first time since August 2021, new listings in Miami are on the rise. In September 2023, Miami saw a total of 3,295 new listings, marking a 2.7% increase from the previous year. This is great news for buyers, as it offers more options in the still-competitive Miami-Dade market. However, it’s worth noting that this increase is typical for this season, which tends to bring a surge in new listings. Nevertheless, we need more listings to address the persistent issue of low inventory.
Looking back to September 2022, there were 1,351 new listings for single-family homes in Miami. Fast forward to September 2023, and that number has seen a 1.2% increase, with 1,367 new listings. Similarly, for townhomes and condos, in September 2022, there were 1,858 new listings. This year, there’s been a 3.8% uptick, with 1,928 new listings in September 2023. However, the monthly data indicates that both single-family homes and condos experienced a 5.72% and 3.4% decrease in new listings, respectively.
The supply of homes for sale in South Florida has slightly improved, but it remains a seller’s market, with Miami-Dade holding 3.8 months’ worth of houses and 5.8 months’ worth of condos. A balanced market typically maintains a supply of homes that can last between six to nine months. Zooming out, at the end of September, the total housing inventory nationwide stood at 1.13 million units. It’s up 2.7% from August, but interestingly, it’s down 8.1% from the previous year. To put it in perspective, the unsold inventory equates to about a 3.4-month supply, a slight increase from 3.3 months in August and 3.2 months in September 2022.
These measures help us gauge how hot the market is. When comparing September to August 2023, we see a slight increase. In August, sellers were receiving 97% of their original list price for single-family homes. However, in September, this percentage inched up to 98%. It’s not a massive leap, but it indicates that sellers might have had a tad more negotiating power, as they were closer to their desired prices.
Shifting our attention to townhomes and condos, the median percent of the original list price received remained steady at 97% in both August and September 2023. No significant changes here.
Now, if we look at the median time to contract for single-family homes, in August, it took an average of 23 days to get a contract signed. However, in September, that time frame shortened to just 21 days. For townhomes and condos, there’s an 11.8% decrease in the time it took to secure contracts. In August, it took an average of 34 days to get a contract signed, but in September, this timeframe shortened to 30 days. Both measures indicate the continued strength of the Miami market, which is becoming increasingly competitive for buyers.
A recent report by AOL reveals that the national housing market has experienced staggering growth, with a 49% increase compared to the period before the pandemic in February 2020. What’s even more intriguing is that Miami is now ranked as the fifth most valuable city in terms of the housing market. Previously, it held the ninth spot. This further underscores that the Miami real estate market is red-hot!
The burning question remains: Should you buy a home in this scorching market, or should you wait for interest rates to cool down? These are the questions my clients have been grappling with. I concur with what Barbara Corcoran mentioned in an interview on this exact topic. Despite the high interest rates, she believes it’s the best time for buyers to get ahead of the market. Rising interest rates are pushing buyers to the sidelines, resulting in less competition. Furthermore, mortgage rates have risen, and consumers’ disposable income has decreased. In these circumstances, most people are inclined to wait until interest rates drop. However, what many fail to realize is that when rates eventually decrease, we’ll see a massive influx of buyers who’ve been holding out, which will drive prices up. Therefore, it is indeed a favorable time to buy a house right now, provided it aligns with your timing and circumstances. The Miami market is expected to heat up even more when interest rates finally decline.
The Miami real estate market is a dynamic landscape influenced by various factors, including interest rates, inventory, and buyer behavior. Whether you’re a buyer or seller, staying informed about these trends is crucial for making informed decisions in this ever-evolving market. Stay tuned for more updates on Miami’s real estate scene, and don’t hesitate to reach out if you have any questions or need guidance on your real estate journey in Miami. Your trusted Miami real estate agent, Sharon Colon, is here to assist you every step of the way.
Thank you for reading. I look forward to connecting with you in Miami soon!
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